Electric sector job quantity impact

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Approximately 550,000 workers are currently employed in the U.S. power generation segment of the electricity sector. The strategies employed in the electricity sector in Reinventing Fire affect jobs numbers in this segment in four ways (jobs estimates were not made for the transmission and distribution segments of the sector, though qualitatively, the net effect is probably positive and may be substantial). First, in the Transform>/i> case, annual electricity demand is reduced 28% by 2050 despite electric vehicle adoption. The demand reduction shrinks the size of the sector and reduces total jobs. Second, the shift toward a largely renewable portfolio of generating technologies leads to the total phase-out of coal and nuclear power generation by 2050—leading to a job reduction in coal and nuclear employment. Third, the renewable technologies that substitute for coal and nuclear generation create new jobs—nearly doubling jobs in power generation, since renewable generating technologies have higher job intensities. However, this gain is reduced, perhaps eliminated, by a fourth effect: the Transform case results in somewhat higher electricity prices and lower disposable income for consumers, reducing spending and hence jobs throughout the economy. Much of the job loss from an increase in electricity prices, shown here for the Transform case, would also occur if we maintained the current electricity system. The estimated costs of Transform (in present value cost) are only two percent higher than the costs of maintaining the business-as-usual system.

Overall, these changes in the power generation segment of the electricity sector look roughly job-neutral. Transform’s reduced fuel consumption is accounted for in the Industry sector, reduced coal-hauling in the Transportation sector. Job creation through an increased share of domestic equipment manufacturing or development of renewable-technology export markets wasn’t analyzed because we had no basis to assume whether American manufacturers would lead or lag foreign competitors, but clearly this is an important further opportunity.

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